[bcjdjsndon]

> $400k for a house is backed by the house.

And the deposit. A bad faith actor could immediately default on their brand new mortgage and the bank would need to spend money going through the courts reclaiming then selling the house.... That simply costs money . The deposit covers that risk.

This is not to mention people burning a house down. Bank can hardly recoup the sale price from a burnt out husk.

If houses were such low risk assets, banks would be buying them. They wouldn't be selling you a shovel in a goldrush and letting you take all the risk